El Paso Corp. (ticker: EP, exchange: New York Stock Exchange (.N))
News Release -
El Paso Merchant Energy and Niagara Mohawk Power Corporation Announce Firm Supply and Asset Management Agreement
HOUSTON, TEXAS, June 1, 2000ŚEláPaso Merchant Energy Company, a business unit of EláPaso
Energy Corporation (NYSE:EPG), and Niagara Mohawk Power Corporation, a wholly
owned subsidiary of Niagara Mohawk Holdings Inc. (NYSE:NMK), announced that they
entered into a seven-month asset management agreement beginning April 1, 2000.
EláPaso Merchant Energy will provide comprehensive gas supply and storage
refill management service to Niagara Mohawk. This service includes managing
Niagara Mohawk's existing term supply as well as arranging incremental gas
supply, managing interstate transportation, and optimizing underground storage.
The executed contracts will be filed with the New York Public Service Commission
Under the agreement, EláPaso Merchant Energy will provide
bundled gas supply service designed to realize the competitive value of Niagara
Mohawk's existing supply, transportation, and underground storage contracts
with the ultimate goal of reducing the unit cost of gas for the utility's
sales customers. EláPaso Merchant Energy will pay Niagara Mohawk a fixed monthly
fee for the right to optimize the assets.
"We are excited to have this opportunity to work with
Niagara Mohawk," said GregáG.áJenkins, president of EláPaso
Merchant Energy. "EláPaso's ability to manage assets and risk, together
with Niagara Mohawk's knowledge of the upstate New York market, will assure cost
savings for Niagara Mohawk's ratepayers while allowing EláPaso to implement our
strategy of providing premium wholesale energy services to our traditional
"Niagara Mohawk is committed to continuous improvement and
always seeks better ways to get the job done," said Joe Ash, Niagara Mohawk's
vice president of Gas Delivery. "EláPaso Merchant Energy has a proven track
record in managing the assets of other gas distribution companies. This
agreement combines EláPaso's considerable resources and strengths with our
goal of achieving the lowest possible gas costs for our customers while allowing
us to evaluate this type of strategic partnership as a long-term approach to gas
With over $16 billion in assets, EláPaso Energy Corporation
provides comprehensive energy solutions through its strategic business units:
Tennessee Gas Pipeline Company, EláPaso Natural Gas Company, Southern
Natural Gas Company, EláPaso Merchant Energy Company, EláPaso Energy
International Company, EláPaso Field Services Company, and EláPaso Production
Company. The company owns North America's largest natural gas pipeline system,
both in terms of throughput and miles of pipeline, and has operations in natural
gas transmission, merchant energy services, power generation, international
project development, gas gathering and processing, and gas and oil production.
On May 5, the stockholders of both EláPaso Energy and The Coastal Corporation
overwhelmingly voted in favor of merging the two organizations. The combined
company will have assets of $35 billion and be one of the world's leading
integrated energy companies. The merger is expected to close in the fourth
quarter of this year, concurrent with the completion of regulatory reviews.
Visit EláPaso Energy's web site at www.epenergy.com.
Niagara Mohawk Power Corp., a wholly owned subsidiary of Niagara
Mohawk Holdings Inc. (NYSE:NMK), is a regulated energy delivery company with the
largest service area in New York state. The company provides electricity to more
than 1.5 million customers across 24,000 square miles of Upstate New York. The
company also delivers natural gas to more than 530,000 customers over 4,500
square miles of eastern, central and northern New York.
Niagara Mohawk Power Corporation
Kenneth M. Tompkins
Director, Corporate Communications
Office: (315) 428-3523
Fax: (315) 428-5524
This release includes forward-looking statements and projections, made in reliance on the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The companies have made every reasonable effort to ensure that the information and assumptions on which these statements and projections are based are current, reasonable, and complete. However, a variety of factors could cause actual results to differ materially from the projections, anticipated results or other expectations expressed in this release. While the companies make these statements and projections in good faith, neither the companies nor their managements can guarantee that the anticipated future results will be achieved. Reference should be made to the companies' (and their affiliates') Securities and Exchange Commission filings for additional important factors that may affect actual results.